You people are seriously not thinking clearly. - Reawakening A 10 Year Old Post
You people are seriously not thinking clearly.
This situation is not the end of the world. It is not some massive shift in the world of Bitcoin. It is not MtGox’s fault. It is not the high frequency traders fault. It is not even the speculators fault. Merchant acceptance will not save us from these things.
We are dealing with a massive new technology that has the potential to change everything. It will change how money is transferred between countries. It could become the international standard among currency evaluation. It will change how the drug/black market operates. It will change how Governments regulate borders. This is not a speculative stock. This is not a currency useful for day-to-day trading. You cannot be a “bitcoin millionaire” without knowing that if the network got cracked, you’d be worth $0 in minutes.
We have a long, long way to go yet. In order for the above things to happen(and they WILL happen, even if bitcoin gets cracked or made illegal- something else will replace Bitcoin), the market size of Bitcoin needs to increase.
1. $50k - Early adopters will push it up($0.01->$0.20). 2. $1 million - People will start using it for small transactions(silk road). 3. $50 million - Small time illegal activity will flow through it, and people will start to use it to transfer money across borders(See; Argentina post recently). 4. $1 billion - Mid-level illegal transactions and mid-sized legal transactions will flow through it. Angel and VC Investors(200k - 5 million) will move in in increasing size will both invest and create startups(happening now; this is the step we are on. We will never go back to step 3 unless the Bitcoin network itself is cracked). 5. $25 billion - Higher level illegal transactions(mob bosses) and larger investors(multi-million sized) start to move in. Governments start to get involved, try to regulate what they can, and create rules for the system. High net worth individuals use it for international currency transfers. 6. $400 billion - After that, large businesses & investors move in. Becomes the de-facto standard for illegal activity. Government regulation cracks down and becomes more rigid. Some(A few) Bitcoin businesses are shut down by the Government without warning, prompting fear and anger. Small companies regularly use it for international currency transfers. 7. $1 trillion - After that, International currency movements start to flow through it. Very large investors move in, it is talked about as if it were standardized and common. Businesses learn to follow Government rules and procedures become standardized. Large businesses use it to transfer currencies internationally. 8. $5-20 trillion - Becomes the de-facto standard of international trade and currency evaluation, replacing the dollar as the global standard. Prices stabilize and shift only a fraction of a percent a day. Can now be used as a real currency for the first time since inception.
Do I know for sure this will happen? Of course not. But the first 4 steps were pretty clear in hindsight. And it makes sense- Why would ANYONE use the dollar for international money transfer post-Bitcoin? It depreciates, it is expensive to move, it is heavily regulated and tracked, it is subject to seizure. It is subject to the whims and mistakes of one government, who are all subject to the whims of their short-sighted voters.
So now how the fuck do you go from a $500 million currency to a $5 trillion currency? It isn’t going to be a linear graph- that doesn’t make any sense. It isn’t going to be a smooth rise- Why would it? If everyone can see a nice, smooth, pretty graph going up, everyone is going to buy into that nice, smooth, pretty graph. It isn’t going to be unidirectional- If the price always went up, everyone would buy into the up, and it would overshoot any and every step. It isn’t going to happen quickly- Many of these steps take time to build confidence and make mistakes to learn from.
No, it is going to be a very painful up and down process. Because the technology has so much potential, it is going to experience explosive growth. Because it experiences explosive growth, it is going to have dramatic, painful, scary collapses. Then there will be fear. Then it will stabilize, and then it will start growing again. A few months later, it will explode again as it approaches the next big transition.
It takes time for Bitcoin companies to get their systems in order. It takes time for them to earn our trust and for us to weed out the scams and unreliable ones. It takes time for VC and Angel investors to evaluate and plan Bitcoin ventures. It takes time for Bitcoin to adapt to its own growth.
For those who think merchant adoption and currency status are the step we should be on, you are gravely mistaken. The only use that merchant adoption has right now is 1. Getting more people into it/increasing transactions, and 2. making a legal case for why Bitcoin shouldn’t be illegal(which would slow us down by 10-25 years).
This is not the last big rise. This is not the last big crash. We aren’t even at the bottom of this one. Until the network either gets cracked or replaced, this is going to keep moving forward. There is no going back; We’ve improved the Gold coin, the Dollar, and the wire transfer all at once. Hang on to your seat, and stop panicking over just another crash.
tl;dr: This is not the last big rise. This is not the last big crash. Stop panicking and focus on the long view.